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Office of Labor-Management Standards
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Office of Labor-Management Standards (OLMS)


U.S. Department of Labor

Office of Labor-Management Standards
Birmingham Resident Office
950 22nd Street North
Room 601
Birmingham, AL 35203
(205)731-0239 Fax: (205)731-0305


September 24, 2010

Mr. Larry Phillips, President
Communications Workers AFL-CIO
Local 83711
4605 Airport Road
Gadsden, AL 35904

LM File Number: 541-253
Case Number: ||||||||||

Dear Mr.Phillips:

This office has recently completed an audit of Communications Workers AFL-CIO,
Local Union 83711 under the Compliance Audit Program (CAP) to determine your organization’s compliance with the provisions of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). As discussed during the exit interview with you, Treasurer Dexter Marsh, and Committeeperson Martha Loyd on September 15, 2010, the following problems were disclosed during the CAP. The matters listed below are not an exhaustive list of all possible problem areas since the audit conducted was limited in scope.

Recordkeeping Violations

Title II of the LMRDA establishes certain reporting and recordkeeping requirements. Section 206 requires, among other things, that labor organizations maintain adequate records for at least five years by which each receipt and disbursement of funds, as well as all account balances, can be verified, explained, and clarified. As a general rule, labor organizations must maintain all records used or received in the course of union business.

For disbursements, this includes not only original bills, invoices, receipts, vouchers, and applicable resolutions, but also documentation showing the nature of the union business requiring the disbursement, the goods or services received, and the identity of the recipient(s) of the goods or services. In most instances, this documentation requirement can be satisfied with a sufficiently descriptive expense receipt or invoice. If an expense receipt is not sufficiently descriptive, a union officer or employee should write a note on it providing the additional information. For money it receives, the labor organization must keep at least one record showing the date, amount, purpose, and source of that money. The labor organization must also retain bank records for all accounts.

The audit of Local 83711’s 2009 records revealed the following recordkeeping violations:

1. Failure to Maintain Records/Supporting Documentation for Disbursements

Local 83711 did not retain adequate documentation for disbursements totaling at least $153.00. For example, Check Number ||||, dated 6-24-09, in the amount of $153.00, payable to President Larry Phillips for expenses did not have an invoice, bill, or receipt.

2. Information not Recorded in Meeting Minutes

During the audit, Mr. Phillips advised OLMS that the membership authorized the rental of a conference room at the Holiday Inn in Gadsden, AL for a union function in June 2009 in the amount of $153.00. The minutes of the meetings do not contain any reference to this issue. Article VIII of the Local By Laws requires that expenses of the local shall be authorized by the Executive Board and the membership. Minutes of all membership or executive board meetings must report any disbursement authorizations made at those meetings.

3. Failure to Maintain Supporting Documentation for Fixed Assets

Local 83711 did not maintain a fixed asset list or inventory detailing the fixed asset holdings of the union for the audit year or any previous year. The union had fixed assets, including, but not limited to: computers, fax machine, and office furniture. The proper maintenance of union records is the responsibility of the president and treasurer (or corresponding principal officers) of your union who are required to sign the union’s LM report.

4. Lack of Salary/Allowance Authorization

Local 83711 did not maintain records to verify that the allowances reported in
Item 24 (All Officer and Disbursements to Officers) of the LM-3 for Shop Chair
Carol English was the authorized amount and therefore was correctly reported.
English was paid a monthly $30.00 allowance for her cell phone. The union must
keep a record; such as meeting minutes, to show the current salary and/or
allowances authorized by the entity or individual in the union with the authority to establish salaries.

As previously noted above, labor organizations must retain original receipts, bills, and vouchers for all disbursements. The president and treasurer (or corresponding principal officers) of your union, who are required to sign your union’s LM report, are responsible for properly maintaining union records.

Based on your assurance that Local 83711 will retain adequate documentation in the future, OLMS will take no further enforcement action at this time regarding the above violations.

Reporting Violations

The audit disclosed violations of LMRDA Section 201(b), which requires labor organizations to file annual financial reports accurately disclosing their financial condition and operations. The Labor Organization Annual Report (Form LM-3) filed by Local 83711 for fiscal year ending September 30, 2009 (latest year on file), was deficient in the following areas:

1. Fixed Assets Value not Reported

Lines 29 A and B of Form LM-3 were annotated with $0.00 when in fact the
union owned several computer systems, a fax machine, and office furniture.
The instructions for Item 29 state the book value at the start and end of the
reporting period of all fixed assets, such as land, buildings, automobiles, and
office furniture and equipment owned by the organization should be entered.

2. Failure to File By Laws

The audit disclosed a violation of LMRDA Section 201(a), which requires that a union submit a copy of its revised constitution and bylaws with its LM report when it makes changes to its constitution or bylaws. Local 83711 amended its By Laws in 2007 but did not file a copy with its LM report for that year or any year since. Local 83711 took immediate steps to correct the violation and has now filed a copy of its constitution and bylaws.

I am not requiring that Local 83711 file an amended LM report for 2009 to correct the deficient items, but Local 83711 has agreed to properly report the deficient items on all future reports it files with OLMS.

I want to extend my personal appreciation to Local 83711 for the cooperation and courtesy extended during this compliance audit. I strongly recommend that you make sure this letter and the compliance assistance materials provided to you are passed on to future officers. If we can provide any additional assistance, please do not hesitate to call.

 

Sincerely,

 

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Investigator

cc: Treasurer Dexter Marsh